Purpose of Safety Nets • The Safety Net Spreadsheet process is a manual work-around used by Competitive Retailers (CR) in the Texas retail electric market to ensure that a customer receives electric service in a timely manner.

Uses of Safety Nets • The safety net process should be used for legitimate purposes when sending MVI transactions and not to bypass standard rules and processes. • Invalid uses are: – Reconnects after DNP – Date changes

Standard Safety Nets • The REP may submit a standard safety net spreadsheet one day prior to the requested MVI date if an 814. 16 transaction was sent but has not received an 814. 05 or 814. 28 “Permit Required” from ERCOT.

Standard Safety Nets • Standard Safety Net spreadsheets should be sent between the hours of 11: 00 to 12: 00 PM CPT. • AEP will reject safety net spreadsheets received outside the 11: 00 to 12: 00 PM CPT time frame and/or earlier than the day prior to the requested MVI date.

Standard Safety Nets • If the spreadsheet is rejected the following message will appear on the email’s subject line: “AEP-Safety-Net-RESPONSE-Dated requested“

Standard Safety Nets • The following message will be in the e-mail: “Reject Code 09 -Completed Unexecutable” “ Pursuant to the Safety-net Spreadsheet Process for Standard Move-Ins as outlined in Section 7. 3. 2. 1 of the Retail Market Guide dated August 1, 2007, AEP is rejecting this request because it was not received between the hours of 11: 00 to 12: 00 PM CPT the Business Day prior to the Customer’s requested move-in date. ”

Priority Safety Nets • Safety-Net Spreadsheet process for Priority Move-Ins as outlined in section 7. 3. 2. 2. of the Retail Market Guide dated August 1, 2007. – Priority MVI transactions are orders submitted with priority code of “ 99” – MVI orders received without the priority code (99) will have the request date scootched to provide AEP the required two business days notice

Priority Safety Nets • The REP may submit a Priority Safety Net spreadsheet after 2 PM CPT on the requested date if an 814. 16 transaction was sent but has not received an 814. 05 or 814. 28 “Permit Required” from ERCOT.

Priority Safety Nets • AEP will reject Priority Safety Net spreadsheets received earlier than 2: 00 PM CPT. • If the spreadsheet is rejected the following message will appear on the email’s subject line: “AEP-Safety-Net-RESPONSE-Dated requested“

Priority Safety Nets • The following message will be in the email: “Reject Code 09 -Completed Unexecutable” “ Pursuant to the Safety-net Spreadsheet Process for Priority Move-Ins as outlined in Section 7. 3. 2. 2 of the Retail Market Guide dated August 1, 2007, AEP is rejecting this request because it was received prior to 2: 00 PM CPT on the requested date. ”

Priority Safety Nets • • AEP will also reject all Priority Spreadsheets received after 5 PM CPT The following message will be in the email: Reject Code 09 - Completed Unexecutable “ AEP is rejecting this request because it was received after our normal business hours of 5 PM CPT. Please note that we ( do / do not see a pending MVI order date for 09/13/07 )”

Modify Existing Orders

MVI/MVO Cancel Requests • CRs should call our CRR Hotline as soon as possible to cancel an MVI/MVO transaction which is scheduled to be completed within two days of the requested date.

Switch Cancel Requests • CRs should call our CRR Hotline as soon as possible to cancel a switch transaction which is scheduled to be completed within five days. • AEP will stop the order from processing in our system but CR must also initiate Marketrak Cancel so that the switch order is canceled at ERCOT.

MVI Date Change Request • If less than two (2) days prior to the request date, CR should call the CRR Hotline to change the date of the MVI and complete the transaction as a priority order.

Alternate Process • If the MVI order is greater than two (2) days, please send the 814. 08 electronic transaction to cancel the scheduled MVI order. Send the priority (code 99) MVI order with a new requested date.

Email • CRs can always send requests to [email protected] com. The Market Transaction Team will acknowledge your request with an immediate e-mail notification and the request will be completed within five (5) business days. • Priority requests should not be sent via email but should be addressed by contacting the CRR Hotline

Marketrak • • MT requests will be completed within the market protocol which is seven (7) business days Priority requests should not be initiated via Marketrak but should be addressed by contacting the CRR Hotline

Account Manager • Issues can also be escalated to your assigned Account Manager.

Denial Of Access Before 3 rd Consecutive Estimate • We leave the market approved door hanger every time we are unable to read the meter for DOA. • We populate the Estimation Loop on the 867 with the no read information. • On the 2 nd consecutive estimate, an AEP Customer Service Representative (CSR) is assigned to contact the customer and attempts to resolve the issue.

DOA Disconnect Process After the 3 rd Consecutive Estimate • AEP will wait 10 Retail Business Days before processing an internal disconnect. – CRs can send a 650. 01 RC 004 to communicate the customer’s selection of an available resolution – CRs can send a 650. 01 DC 004 to disconnect the customer. • After 10 Retail Business Days any 650 DC 004 will be rejected.

DOA Disconnect Process After the 3 rd Consecutive Estimate • The order will be routed to the assigned CSR and they will make the determination of if/when the customer gets disconnected. • Once a disconnect order is issued, Move In or Switch transactions will be rejected until the issue is resolved. • If the issue has been resolved or is in the process of being resolved, the CSR will complete the 650 (if sent by CR) as Unexecutable.

DOA Disconnect Process After the 3 rd Consecutive Estimate • Once the premise is de-energized, a 650 will be sent to the Rep of Record either by sending the 650. 02 (if sent by CR) or 650. 04. • AEP will continue to work with the customer to resolve the issue.

DOA Reconnect Process After Disconnection for 3 Consecutive Estimates • CRs should issue a 650. 01 RC 004 if customer agreed to resolve the issue. • Once issue has been resolved: – AEP will issue a reconnect order if an internal disconnect order was issued. – Wait for 650 RC 004 if an external disconnect was issued. • The order will be routed to the assigned CSR and they will determine if/when the customer gets reconnected.

DOA Reconnect Process After Disconnection for 3 Consecutive Estimates • The reconnect order will be completed within 3 business days. • Once the premise is re-energized, a 650 will be sent to the Rep of Record either by sending the 650. 02 (if sent by the CR) or 650. 04

Master Meter Disconnects Requirements • CR must fulfill the tenant Notification requirements outlined in PUCT Substantive Rule 25. 483 (j) which states that 4 days before disconnecting, CR must post at least 5 notices informing tenants of the disconnection for Non Pay in both English and Spanish.

Master Meter Disconnect Process • CR should contact their Retail Account Manager before sending a 650 DC 001 if they want AEP to help fulfill the posting requirement. • The CR should email the notice to their Retail Account Manager at least two days before the notice should be posted. The notice should be provided in both English and Spanish.

Master Meter Disconnect Process • On the requested date, AEP personnel will post the requested number of notices in public place at the Master Metered complex. • CR should issue a 650 DC 001 with the appropriate requested date. • Any 650 DC 001 issued without posting the proper notification will be completed Unexecutable.

Master Meter Disconnects Associated Fees • $45 per site • Fee is sent on the 810 using the SAC 04 code MSC 034.

Disconnect for Non Pay on Fridays • Orders issued for a Friday date with a “N” Flag will be scootched to Monday. • Orders not completed on a Friday with a “N” flag will be rescheduled for Monday. • Orders with a “Y” flag could be worked on a Friday.

AEP Texas - Key Rule Provisions • Regulatory Filings (Cont) – Amortization period of meters is 5 -7 years – A levelized surcharge preferred – ROE from last rate case is utilized – TDU will file annual reports which will include costs incurred and revenues received from the surcharge – There is a “presumption” that costs spent in accordance with an approved plan are reasonable and necessary

2007 Texas DSM Legislation • Electric Utility Energy Efficiency Programs, Goals, and Cost-Recovery – Electric utilities’ annual goal is raised to 15% of annual growth in demand for the year 2008 and program costs cannot be more than 75% above the 2007 program budget – Electric utilities’ annual goal is raised to 20% of annual growth in demand for the year 2009, and program costs cannot be more than 150% above the 2007 program budget – An Energy Efficiency Cost Recovery (EECR) Factor ensuring timely & reasonable cost recovery of Utility expenditures will be established by the PUC – PUC will establish an incentive to reward Utilities that exceed their goals

2007 Texas DSM Legislation • Net Metering – Specified that it is the intent of the legislature that net metering and advanced meter information networks be deployed as rapidly as possible to allow customers to better manage energy use and control costs, and to facilitate demand response initiatives. • Interconnection of Distributed Renewable Generation – Utility shall allow interconnection of generation of less than 2 MW systems that have a 5 -year warranty if it doesn’t exceed the utility service capacity

2007 Texas DSM Legislation • Educational Facilities – Goal to reduce a school district and higher education institution annual electric consumption by 5 percent each state fiscal year for six years, beginning September 1, 2007. – Requires schools to purchase energy-efficient light bulbs.

Program Types • Standard Offer Program (SOP) – A program under which a utility administers standard offer contracts between the utility and energy efficiency service providers. – – • Fixed price per k. W and k. Wh First Come, First Serve Market Transformation Program (MTP) – Strategic efforts to induce lasting structural or behavioral changes in the market that result in increased adoption of energy efficient technologies, services, and practices.

Inadvertent Process < 150 Days • Inadvertent is 150 days or less – – – AEP acknowledges receipt of issue AEP blocks any MVI transactions AEP will reinstate the original CR to DOL+1, Available meter read date, or a forward date Once both CRs agree then AEP agrees in Marketrak – Account is setup to accept the backdated MVI

Inadvertent Process > 150 Days • Inadvertent is greater than 150 days – AEP acknowledges receipt of issue – AEP blocks any MVI transactions – Both CRs must agree to cancel/rebills beyond 150 days – AEP will reinstate the original CR to DOL+1, Available meter read date, or a forward date – Once both CRs agree then AEP agrees in Marketrak – Account is setup to accept the backdated MVI

Possible Inadvertent • Marketrak filed with a pending MVI – AEP gives an opportunity for the gaining CR to cancel the transaction – If the Gaining CR does not cancel the transaction, the MVI will be allowed to complete and the Standard Inadvertent Process will be followed

MVO on Inadvertent Issue • If a MVO is pending – AEP will cancel the MVO – AEP will inform the CR that the MVO has been cancelled due to an unresolved inadvertent issue • If a MVO is completed – Either the gaining or losing CR must issue a priority MVI (code 99) to restore the customer’s power

3 rd Party MVI on an Inadvertent Issue • If a MVI is pending – AEP will cancel the MVI – Reason for the cancellation will be noted on 814. 28

MVI Rejected • When CR sends backdated MVI before issue is in “Agreement Reached” status in Marketrak, AEP will reject the backdated MVI